master volume/pu balance problems?

I'm thinking of going from the typical vol/vol/tone set up to master volume/pickup balance on a passive MIA jazz bass with Duncan Antiquitiy II pickups. I think I remember reading somewhere that there can be problems with this due to output, tone degradation, or phase cancellation issues in some situations. I can't seem to find anything on it now. Anyone have any experience with this?

Yep. You want to get one of the special pickup balance pots that Bartolini (and others) make. They're essentially two "half pots" that end in the middle. So if you were measuring from the wiper to one end of the pot with an ohm meter, you'd find that the resistance goes up from zero at one end, to maximum resistance in the middle, and then doesn't change anymore from the middle to the other end. The other half-pot would be exactly the opposite (same behavior, but measured from the other end).

Basically what happens is, if you use a "normal" pot, as you rotate it through its range you get resistance in series with BOTH pickups, which is not what you want. In that case, what'll happen is that your bass will have less volume when the pickup balance pot is anywhere "in the middle", and you'll get a huge volume boost when it's at either end.

The special balance pot eliminates this undesirable behavior. What it does is to mimic the exact same behavior as the vol/vol setup. In other words, when you're at one end, you'll have full volume on one pickup and zero volume on the other. As you rotate towards the middle, you'll still have full volume on the one pickup, and the other one will gradually increase. At the exact middle, you'll have full volume on both pickups. As you rotate beyond the middle, the "other" pickup will remain at full volume, while the first one gradually decreases to zero.

That's exactly the behavior you want. That way your overall volume will remain constant as you rotate the pickup balance pot through its range.
From an electronic standpoint, this situation would be exactly similar to a vol/vol setup, so there won't be any issues with phase cancellation or tone degredation. Make sure that each half of your pickup balance control has the same resistance as the volume controls you're currently using.